Re:think 2013http://www.adweek.com/taxonomy/term/13858/all
enFacebook Craves Conversions More Than Clickshttp://www.adweek.com/news/technology/facebook-craves-conversions-more-clicks-148050
Tim Peterson<p>
Facebook isn&rsquo;t crazy about clicks as digital advertising&rsquo;s be-all, end-all performance metric. Rather,&nbsp;the company&nbsp;is more concerned with conversions.</p>
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In the&nbsp;fall, Facebook <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;ved=0CDUQFjAA&amp;url=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F6cc4cf0a-0584-11e2-9ebd-00144feabdc0.html&amp;ei=0dNIUbvcDYqPiAL_l4CYAw&amp;usg=AFQjCNHCgcRV44rMqo5963IhfdE5FRU81g&amp;sig2=ZoypqXnjY2LckGVxP0qveQ&amp;bvm=bv.44011176,d.cGE" target="_blank">partnered</a> with data provider Datalogix to launch a tool&nbsp;that helps&nbsp;advertisers figure out how many ads it should show a given user. The tool compiles this Goldilocks recipe based on Facebook&rsquo;s ad impression data and Datalogix&rsquo;s offline purchase data. Now, Facebook is opening up a bit about results.</p>
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Across 29 campaigns, Facebook found that splitting households into four subgroups based on&nbsp;how much&nbsp;they&rsquo;ve purchased a brand&rsquo;s products or a product in a given category has&nbsp;produced an average 22 percent&nbsp;lift in profits, said Brad Smallwood, the company&rsquo;s vp of measurement and insights, in a preview of a presentation he&#39;ll make today&nbsp;at the Advertising Research Foundation&rsquo;s Re:think 2013 conference.</p>
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In an interview with Adweek before the presentation, Smallwood acknowledged that not all advertisers will&nbsp;achieve&nbsp;such results&nbsp;given the number of variables involved in constructing the Goldilocks recipe. Instead, the idea is to&nbsp;change how advertisers&nbsp;view digital advertising, which obviously includes ads on Facebook. That is, to get away from a narrow focus on an ad&rsquo;s immediate return on investment (did it get enough clicks to justify its cost?) and refocus on whether it fulfilled a brand&rsquo;s ultimate goals (read: sales).</p>
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As a hypothetical example of what the Facebook-Datalogix tool can do, Charmin could&nbsp;determine the number of ads it should show someone who regularly buys their toilet paper compared with someone who doesn&rsquo;t buy their toilet paper, someone who buys a lot of toilet paper but isn&rsquo;t loyal to any brand and someone who doesn&rsquo;t really buy toilet paper (i.e., a gross person). Charmin could then retool their ad buy to make sure they&rsquo;re not wasting impressions&nbsp;or dollars on any of the subgroups or leaving potential sales on the table by not investing enough.</p>
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Smallwood referred to this mix-modeling as finding the &ldquo;effective frequency&rdquo; for a campaign or advertiser. Again, he stressed that the mix changes from brand to brand, even product to product, and especially user to user. That&rsquo;s where Facebook comes in.</p>
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Not only does Facebook have almost the widest reach of any online property, but the wealth of demographic and interest information&nbsp;that users supply&nbsp;gives the company a unique position from which to evaluate and tweak their campaigns. It&rsquo;s easy to see how this tool could be Facebook&rsquo;s biggest bait in luring TV budgets to online.</p>
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As with any conversation around getting advertisers to release their reliance on clickthrough rates, Smallwood, who was joined in the interview by Facebook&rsquo;s head of measurement platforms and standards Sean Bruich, invoked TV advertising, particularly the broad reach of TV and the evolution of TV advertisers&rsquo; ability to measure reach and fine-tune frequency. Bruich cited research from in the early 1980s&nbsp;that helped&nbsp;advertisers determine the right reach for their TV campaigns&nbsp;and balance the frequency with which those ads were shown to ensure a profitable campaign.</p>
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&ldquo;What we&rsquo;ve found is those truths researchers back in the &rsquo;80s found about TV seem to be true about online,&rdquo; Bruich said. That said, online, and more specifically Facebook, takes things a step further in being able to dial that reach and frequency mix for more specific audiences than available through TV.</p>
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&ldquo;The ROI of a campaign is made up of a lot of pieces of a campaign. We want to figure out what&rsquo;s good and fix what&rsquo;s not as good,&rdquo;&nbsp;Bruich explained.</p>
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When Adweek asked Smallwood what the ROI of his talk on Wednesday would be, he&nbsp;replied simply,&nbsp;&ldquo;Success is getting [industry executives] to think beyond just ROI.&rdquo;</p>
TechnologyAdvertising Research FoundationAnalyticsBrad SmallwoodData ManagementDatalogixTim PetersonFacebookFacebook adsRe:think 2013Sean Bruichsocial dataTV advertisingWed, 20 Mar 2013 12:00:03 +0000148050 at http://www.adweek.com